Posted on 07/07/2006 8:23:29 AM PDT by Mad Dawgg
WASHINGTON (Reuters) - U.S. employers added a fewer-than-expected 121,000 workers to their payrolls last month, but the jobless rate stayed at a five-year low and hourly earnings rose, a government report showed on Friday.
The Labor Department's employment report was a modest improvement over May's revised gain of 92,000 jobs and led the market to pare back expectations of continued interest-rate increases from the Federal Reserve.
Still, June's wage gains and the 4.6 percent unemployment rate may figure in the inflation-wary central bank's thinking. Average hourly earnings rose 8 cents, or 0.5 percent, while the average work week rebounded from a May dip to match a three-and-a-half high struck in April.
U.S. Treasury debt prices climbed after the report and the dollar fell against the euro and the yen.
Interest rate futures slashed chances of an August rate increase from the U.S. central bank while stock index futures soared, indicating a stronger open for equity markets.
"It's good news because soft employment numbers imply the Federal Reserve will not raise interest rates at their August meeting, but let's not forget that there is a July employment report still to come," said Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York.
The 3.9 percent year-over-year gain in average hourly earnings was the largest in five years, the Labor Department said.
Economists had raised their expectations of job growth on Wednesday. The median estimate in a Reuters poll rose to 185,000 jobs, up from an earlier forecast of 155,000, after a relatively new private indicator called the ADP National Employment Report said private-sector employers created an estimated 368,000 jobs in June.
"The bond market moved up because it was primed for a much bigger payroll number which did not materialize," said Pierre Ellis, senior economist at Decision Economics in New York.
The Fed last week raised the benchmark federal funds rate target a 17th straight time to 5.25 percent. Policy-makers stressed at the time they would base their rate decisions on incoming economic reports and the impact of the data the outlook for growth and inflation.
Fed Vice Chairman Donald Kohn said on Thursday he was aware there was a risk of going too far with interest-rate rises but that higher global credit costs were necessary to maintain price stability after a long period of easy money.
The U.S. economy has slowed since the first quarter as higher gasoline prices, rising borrowing costs and a slowdown in house price appreciation made Americans more cautious about spending.
UnBelieveable. If this and been Clinton as President there would have been banner headlines about how good the economy is.
Hopefully this means the Fed will back off.
Then again they may look at wage growth and tighten again.
ML/NJ
Reuters is German owned.
Anoen want to guess how many jobs Germany started last month?
Unbelieveable. The economy is rolling along and yet we are all doomed according to the MSM with an unemployment rate at 4.6%.
Payrolls increase by 121,000 in June
By JEANNINE AVERSA, AP Economics Writer
WASHINGTON - Employers boosted payrolls by a tepid 121,000 in June — an improvement from the previous month but new evidence that companies are reluctant to bulk up their work forces in the face of high energy prices and slowing economic growth. Wages rose sharply.
The Labor Department's fresh snapshot of job activity released Friday also showed that the nation's civilian unemployment rate held steady at 4.6 percent.
The pickup in payrolls last month followed a gain of 92,000 in May, which turned out to be slightly higher than the 75,000 positions first reported. April's payrolls, however, turned out to be lower, showing a gain of 112,000, rather than the 126,000 previously estimated.
The count of new jobs added in June was the most since March but fell short of economists' forecasts for an increase of around 175,000 new positions.
"When you only have 121,000 jobs being added that sounds pretty puny," said Ken Mayland, economist at ClearView Economics. "On the face of it, this is somewhat disappointing." The job picture, he said, is consistent with other barometers that suggest economic growth is slowing.
On Wall Street, stocks moved lower. The Dow Jones industrials were down 72 points and the Nasdaq was off 14 points in morning trading.
Still, the overall health of the labor market remains sturdy and that is helping some workers gain a bit of bargaining power in negotiating bigger paychecks, economists said.
Workers' average hourly earnings jumped to $16.70 in June, a sharp 0.5 percent increase from May. Economists were expecting a more modest rise of 0.3 percent. For the last 12 months, wages have gone up by 3.9 percent, the largest annual increase since June 2001. Still, economists said those wage gains are still trailing inflation in terms of prices paid by consumers for goods and services.
Wage improvement is good for workers but a rapid sustained acceleration can ignite inflation concerns.
To fend off inflation,Federal Reserve Chairman Ben Bernanke and his colleagues bumped up interest rates last week to their highest point in more than five years.
The Fed left the door open to another increase — depending on how inflation and economic activity unfold — at its next meeting on Aug. 8. Some economists were hopeful that the Fed might take a break in its two-year long rate raising campaign and leave rates alone next time.
But the specter of wage inflation cast some doubt on that scenario, said Mayland. He thinks another increase is in store next month.
In June, weakness in construction and retailing — two sectors that shed jobs — tempered overall employment gains. Financial companies, education and health services, government and even manufacturers were among those boosting jobs.
It's a tricky time for some employers to figure out exactly where the economy is heading — and thus to what extent they need to add or shed workers.
The economy probably logged growth of around a 2.5 percent pace in the April-to-June quarter and could clock in close to 3 percent in current July-to-September period, analysts said. That would mark a considerable slowdown from the first quarter's 5.6 percent pace, the fastest in 2 1/2 years.
Even as the economy has slowed, inflation — led by surging energy prices — has moved higher.
Oil prices closed at a new record high of $75.19 a barrel on Wednesday. Gasoline prices have topped $3 a gallon in some cities.
End Story----
Unfriggin believeable, both stories look like the same guy wrote them. They talk up the slowdown instead of the increase.
I thought I saw on Fox that jobless claims were "expected" to increase by 2000, but they actually decreased by 2000. This article is focusing on the jobs created, no doubt because it was poorer than expected.
This, combined with 4.6 unemployment rate, is portrayed as Bad News.
The media is very consistent. Should a Democrat get into the White House, I would expect the media to trumpet: "Unemployment finally reaches 8%! White House points to plummeting wages and anticipates strong export market!"
This, combined with 4.6 unemployment rate, is portrayed as Bad News.
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Just left an interview with someone who is hiring for a part-time service route job that anybody with half a brain could do ( I have exactly half a brain). The job pays about $425. a month for four days work and 400 miles travel. He said he has had 190 people call and is interviewing 20 people. I am thinking of going part time and signing up for Social Security so that is the reason for my interest but he says he has had a number of young people call about this job. It is hard to reconcile so much interest in a nothing job with the supposed low unemployment rate. I hear stories all the time of huge numbers of people applying for a few openings. I don't trust the government reports.
Yep, the MSM is going to make this seem like the begining of a depression. The 12:00 news on my radio was doom-n-gloom on the jobs report and the market being down.
Women, children, and minorities hit hardest.
Last available data for Germany is May '06: 160,000 additional jobs - which sounds pretty good until you understand that their unemployment rate is 8.3% and it's only that low because retirement/pension age comes earlier than in the US.
It really does get old. Think for a moment if you DON'T have immigration, then theoretically, by adding 121,000 a month, sooner or later every single cotton-picking person in the U.S. is employed. What do the damn "experts" say then? What are their ridiculous "expectations" then?
Reuters is German owned.
Actually they are Arab-controlled
Reuters is German owned.
Actually they are Arab-controlled
These liberal jackasses cannot write a postive story even with positive data to deal with. They hate Bush so much that if 300,000 new jobs were added it still would be "fewer than expected." These people make me sick.
What you submitted as a so-called factual report is basically a non-sequitur. You stated that because four hundred people applied for a job, the job situation in your area is lousy. By itself, that statement proves nothing. What you left out is where you live, the official ue rate there, and the fact that you are free to move to areas where there are many jobs.
You stated that because four hundred people applied for a job, the job situation in your area is lousy.
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Where did I say that? I think you need help with reading comprehension.
just imagine how that story would read if kerry had won!
"The Kerry Economy roars ahead, adds 121,000 jobs"
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